IR Releases
Lenenergo releases FY2013 financial statements in accordance with RAS
MICEX-RTS: LSNG/LSNGP
Credit rating:
Moody’s Ba2 (Outlook: Stable)
Confirmed: February 2014
Press release
Lenenergo releases FY2013 financial statements in accordance with RAS
|
Indicator |
Unit |
2012 |
2013 |
Change 2013/2012, % |
For reference: business plan
|
|
Operational indicators | |||||
|
Productive electricity supply |
Mln kW*h |
30,007 |
29,613 |
-1.3% |
30,230 |
|
Electricity losses |
% |
10,37 |
10,11 |
-0.26 p.p. |
10,21 |
|
Connected capacity |
MW |
523 |
771** |
47.5% |
621 |
|
Revenue and financial result | |||||
|
Sales revenue, including: |
RUB mln |
36,273 |
39,902 |
10.0% |
42,669 |
|
- from electricity transmission services |
RUB mln |
28,816 |
33,207 |
15.2% |
34,271 |
|
- from technological
|
RUB mln |
7,282 |
6,515 |
-10.5% |
8,239 |
|
- from other industrial activity |
RUB mln |
175 |
180 |
2.7% |
159 |
|
Costs |
RUB mln |
32,830 |
36,429 |
11.0% |
38,659 |
|
Gross profit (loss) |
RUB mln |
3,443 |
3,473 |
0.9% |
4,010 |
|
Profit (loss) before taxes |
RUB mln |
2,154 |
1,444 |
-33.0% |
1,979 |
|
Net profit (loss) |
RUB mln |
1,234 |
425 |
-65.6% |
801 |
|
EBITDA *** |
RUB mln |
9,925 |
11,279 |
13.6% |
13,085 |
|
EBITDA margin |
% |
27.36% |
28.27% |
0.91 p.p. |
30.67 |
|
Credit portfolio and debt position | |||||
|
Loans and credits **** |
RUB mln |
27,789 |
33,376 |
20.1% |
33,809 |
|
Average credit offered rate |
% |
8.26 |
8.14 |
-0.12 p.p. |
10.57 |
|
Net debt |
RUB mln |
22,360 |
23,722 |
6.1% |
32,074 |
|
Net Debt/ EBITDA for the last 4 quarters |
- |
2.3 |
2.1 |
- |
2.45 |
|
Investment program | |||||
|
Investment program
|
RUB mln |
14,891 |
18,729 |
25.8% |
18,499 |
* Projections for 2013 are presented in accordance with the business plan for 2013 approved by the Board of Directors, Minutes # 29 of April 30, 2013
** The actual amount of connected capacity is indicated including closing in 2013 of contracts for grid connection of generation facilities in the amount of 400 MW under individual low rates
*** Calculated in accordance with the methodology used in the formation of the business plan for 2013: EBITDA = Net Income + Income Taxes + Depreciation + Interest expense - Interest receivable.
**** Amount of outstanding borrowings (debt of the Company) including interest (sum of lines 1410 and 1510 of the balance sheet)
Formation of revenue and financial result
Sales revenue by results of the 12 months of 2013 amounted to RUB 39,902 mln, regarding revenue growth was RUB 3,629 mln or 10.0%.
The revenue growth was driven by the primary activity, i.e. services in electric power transmission. The revenue from technological connection services thus decreased.
The growth of revenue from electric power transmission totalled RUB 4,391 mln (15.2%) and is caused by increase in the average tariff for transmission services by 16.8%.
Drop in revenue from rendering technological connections services was RUB 767 mln (-10.5%) compared to the same period of 2012. Such decrease was driven by prevalence in the structure of revenue in 2012 of a share of large contracts and property contracts such as: in St. Petersburg – LLC Zenit-Stroy-Invest for the sum of RUB 140 mln, LLC Glavstroy-SPb for the sum of RUB 248 mln; LLC SK Dalpiterstroy for the sum of RUB 143 mln, in the Leningrad region – SPK Dubrava for the sum of RUB 93 mln, LLC Gazstroy for the sum of RUB 101 mln, and JSC LOESK – RUB 93 mln.
The excess of connected capacity volume in 2013 over the plan and indicators of 2012 was driven by closing of obligations for technological connections of electric energy production facilities for the total power of 400 MW. At a considerable volume of connected capacity these contracts were signed under low payment rates without investment expenses and, as a result, have a low size of revenue. The volume of capacity on other applicants actually developed at a level below the fact of 2012 owing to closing qualitatively other structure of contracts signed under higher payment rates.
Cost of rendering services (including depreciation) by results of the 12 months of 2013 amounted to RUB 36,429 mln. Regarding 2012 the growth of costs was RUB 3,599 or 11.0%. The most significant growth was:
- in size of depreciation charges (31.6%, or RUB 1,983 mln), caused by a gain of fixed assets due to commissioning of objects during implementation of the investment program and revaluation of fixed assets carried out as of 31.12.2012;
− on costs of the purchased electric power to compensate losses (13.9% or RUB 662 mln) due to increase in the unregulated tariff of purchase of losses caused by a growth of the actual ATS price in 2013 in comparison with 2012;
− on costs of JSC FGC UES services (9.7% or RUB 596 mln) in connection with increase in networks maintenance rates and payment of losses in the UNEG networks in 2013;
− on repair costs (25% or RUB 268 mln) in connection with carrying out additional measures for successful passing of the autumn and winter period of 2013-2014 and maintenance of the set level of reliability of Lenenergo equipment.
Gross profit of Lenenergo by results of the 12 months of 2013 was RUB 3,473 mln. Growth of the indicator compared to the same period of previous year made RUB 30 mln (0.9%).
Net profit of the Company by results of the 12 months of 2013 was RUB 425 mln. Drop of financial result compared to 2012 was -65.6% (net profit of RUB 1,234 mln for the 12 months of 2012). The main impact had lower growth rate of revenue in comparison with costs increase, growth of expenses of the Company for provision of reserves on doubtful debts and other conditional liabilities.
EBITDA formation
EBITDA characterizing generation of cash flow before taxes and interest payments of the Company by result of the 12 months of 2013 totalled RUB 11,279 mln, and compared to the same period of 2012 increased by RUB 1,354 mln (13.6%).
RUB mln
|
Indicators |
Formula |
2012 |
2013 |
Change 2013/2012 in % | |
|
Revenue |
1 |
36,273 |
39,902 |
10.0% |
|
|
Costs net of depreciation |
2 |
26,552 |
28,168 |
6.1% |
|
|
Gross profit + depreciation |
3 = 1 - 2 |
9,721 |
11,734 |
20.7% |
|
|
Balance of other income and expenses (w/o interest payable and receivable) |
4 |
203 |
-455 |
-323.7% |
|
|
EBITDA, including: |
5 = 3 + 4 = 6 + 7 - 8 + 9 + 10 |
9,925 |
11,279 |
13.6% |
|
|
Depreciation of FA and IA |
6 |
6,278 |
8,261 |
31.6% |
|
|
Interest payable |
7 |
1,788 |
2,217 |
24.0% |
|
|
Interest receivable |
8 |
296 |
644 |
117.4% |
|
|
Income tax |
9 |
920 |
1,019 |
10.8% |
|
|
Net profit |
10 = 3 - 6 + 4 - 7 + 8 – 9 |
1,234 |
425 |
-65.6% |
|
EBITDA growth regarding 12 months of 2012 was primarily driven by higher rates of revenue growth compared to increase in costs (net of depreciation).
Balance of other income and expenses w/on interest payable and receivable thus decreased by RUB 685 mln and made a negative value – mainly due to provision of the reserve on doubtful debts and the reserve on other conditional liabilities that was not compensated by growth of balance of income and expenses on identified non-contractual electricity consumption.
The growth of EBITDA was accompanied by an increase of all components. The most significant growth was driven by accrued depreciation. The growth of accrued depreciation was caused by an increase of fixed assets due to commissioning of new assets at implementation of the Company's investment program and revaluation of fixed assets carried out as of 31.12.2012.
Increase in the amount of interest payable is generally caused by the fact that for the reporting period accrual of interest was performed on the greater part of the principal debt.
The growth of interest receivable is primarily caused by accumulation by the Company of free cash and it successful placement in short-term financial investments.
EBITDA share in revenue (EBITDA margin) regarding the 12 months of 2012 increased by 0.9 p.p. and totalled 28.3% (due to the outpacing growth rate of EBITDA relative to revenue growth) which is positively characterized from the viewpoint of assessment of the Company’s financial position.
Credit portfolio and debt position
Increase in debt on loans and credits including interest (debt of the Company, the sum of lines 1410 and 1510 of the balance sheet) totalled RUB 5,587 mln (20.1%). Borrowings were involved to finance operating and investment activities of the Company, including construction of a distribution network.
Due to the refinancing of credits with high rates, lack of increase in rates under signed credit agreements and conclusion of new contracts on rates which were below average market ones, the average credit offered rate as of 31.12.2013 was 8.14% that is lower than the value of the indicator for the similar period of previous year by 0.12 p.p.
Thus, on April 17, 2013, when the financial market was in good shape, exchange bonds registered in July, 2012 in the volume of RUB 3,000 mln were placed, the interest rate on the coupon was 8.25% per annum.
At the end of 2013, the Company possesses the Securities Prospectus registered in June for four issues of exchange bonds totalling RUB 20 bn for 10 years.
The gain in net debt was lower than the growth of loans and credits due to the growth of the most liquid assets at the end of the period (sums of short-term financial investments and cash).
A greater increase of EBITDA for 4 quarters as of 31.12.2013 relative the increase in net debt resulted in improvement of the ratio of Net Debt/EBITDA (a decrease of 0.1).
Investment activity
CAPEX for 2013 amounted to RUB 18,729 mln, that is RUB 3,838 mln or 26% higher than capital expenses for 2012 (RUB 14,891 mln)
|
Investment program execution |
2012 |
2013 |
Change 2013/ 2012 in % |
|
Deployment, RUB mln w/o VAT |
14,891 |
18,729 |
26% |
|
Commissioning of FA, RUB mln |
16,075 |
18,653 |
16% |
|
Capacity input, MVA |
1,911 |
907 |
-53% |
|
Capacity input, km |
1,581 |
1,846 |
17% |
